Japanese police raided the Tokyo branch of Credit Suisse Financial Products (CSFP), a unit of Credit Suisse Group, on Thursday on suspicion it obstructed an earlier inspection by Japanese financial regulators.

Japanese police raided the Tokyo branch of Credit Suisse Financial Products (CSFP), a unit of Credit Suisse Group, on Thursday on suspicion it obstructed an earlier inspection by Japanese financial regulators.

It was the first time in memory that Japanese police had raided a foreign bank.

CSFP's Tokyo branch is suspected of instructing employees to shred transaction documents and erase e-mail records when an industry watchdog, the Financial Supervisory Agency (FSA), inspected it in January.

The FSA has said it intends to file criminal charges against the branch.

The CS Group said in a statement it regretted Thursday's raid because it had fully cooperated with Japanese authorities over the issue.

"We do not understand why this action is being taken today," an official said, reading from the statement.

Financial regulators said in late July they would revoke the banking licence of CSFP for obstructing investigations and offering inappropriate products to clients.

A CS Group spokeswoman said the bank was puzzled by the raids as since the FSA had wrapped up its investigations in July.

The FSA had been looking into whether CS Group firms in Tokyo engaged in any inappropriate transactions to help clients conceal losses by bouncing them from one account to another, possibly using derivatives transactions.

Financial experts say that, while the move by Japanese police does not cause any economic damage to CS, the raid nevertheless tarnishes the bank’s international image.

From staff and wire reports.

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